AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Evidence
mortgage insurance business, in addition to utilizing reinsurance, we have developed a proprietary risk model that simulates the maximum probable loss resulting from a severe economic event impacting the housing market.
2025 Form 10-K, mortgage proprietary risk-model disclosure; filed February 26, 2026 · Filed 26/02/2026
“Our leadership positions in Specialty Insurance, including our Mortgage and Reinsurance operations, provide us with a meaningful competitive advantage.
Second-quarter 2026 earnings release, CEO competitive-advantage assertion; filed July 28, 2026 · Filed 28/07/2026
Clients not only come to us for capacity, but also for our underwriting expertise, claims capabilities, creative solutions and valuable perspectives that help them better manage risk.”
Second-quarter 2026 earnings release, CEO explanation of client demand; filed July 28, 2026 · Filed 28/07/2026
Dollars in millions)
Three Months Ended June 30,
2026
2025
% Change
Gross premiums written
$
6,126
$
6,196
(1.1)
Net premiums written
4,049
4,348
(6.9)
Net premiums earned
3,985
4,337
(8.1)
Underwriting income (1)
657
818
(19.7)
Underwriting Ratios
% Point Change
Loss ratio
55.1
%
53.1
%
2.0
Underwriting expense ratio (2)
28.4
%
28.1
%
0.3
Combined ratio
83.5
%
81.2
%
2.3
Combined ratio excluding catastrophic activity and prior year development (1)
82.5
%
80.9
%
1.6
(1) See ‘Comments on Non-GAAP Financial Measures’ for further details.
Second-quarter 2026 earnings release, consolidated underwriting results in U.S. dollars in millions and underwriting ratios · Filed 28/07/2026
Underwriting is inherently a matter of judgment, involving important assumptions about matters that are inherently unpredictable and beyond our control, and for which historical experience and probability analysis may not provide sufficient guidance.
2025 Form 10-K, underwriting judgment and model limitations · Filed 26/02/2026
•competition, including increased competition, on the basis of pricing, capacity (including alternative sources of capital), coverage terms, or other factors;
Second-quarter 2026 Form 10-Q, competition risk · Filed 04/08/2026
•Combined ratio excluding catastrophic activity and prior year development(1) of 82.3%, compared to 81.0% for the 2025 first quarter.
First-quarter 2026 earnings release, combined ratio excluding catastrophes and prior-year development; filed April 28, 2026 · Filed 28/04/2026
The persistency rate was 79.9% for the Arch MI U.S.
Second-quarter 2026 Form 10-Q, Arch MI U.S. persistency value; continued in e9 · Filed 04/08/2026
portfolio of primary mortgage insurance policies at June 30, 2026, compared to 81.9% at June 30, 2025.
Second-quarter 2026 Form 10-Q, primary mortgage portfolio scope, June 30, 2026 measurement date and prior-year comparison · Filed 04/08/2026
The persistency rate represents the percentage of mortgage insurance in force at the beginning of a 12 month period that remains in force at the end of such period.
Second-quarter 2026 Form 10-Q, twelve-month mortgage persistency definition · Filed 04/08/2026
Mortgage. Mortgage guaranty insurance policies are contracts that are generally non-cancelable by the insurer, are renewable at a fixed price, and provide for payment of premiums on a monthly, annual or single basis.
2025 Form 10-K, mortgage guaranty non-cancellation and fixed-price renewal terms · Filed 26/02/2026
Upon renewal, the Company is not able to re-underwrite or re-price its policies.
2025 Form 10-K, prohibition on mortgage policy re-underwriting or repricing at renewal · Filed 26/02/2026
If single premium policies related to insured loans are canceled due to repayment by the borrower and the policy is a non-refundable product, the remaining unearned premium related to each canceled policy is recognized as earned premium upon notification of the cancellation.
2025 Form 10-K, repayment-related cancellation of single-premium mortgage policies · Filed 26/02/2026
Gross premiums written by the insurance segment in the 2026 second quarter were 2.9% lower than in the 2025 second quarter, while net premiums written were 5.1% lower than in the 2025 second quarter.
Second-quarter 2026 Form 10-Q, insurance gross and net premiums written changes · Filed 04/08/2026
Adjusting for the non-renewal of certain programs related to the MCE Acquisition, net premiums written would have decreased by 1.8% compared to the same quarter one year ago.
Second-quarter 2026 Form 10-Q, premium comparison adjusted for acquired-program nonrenewals · Filed 04/08/2026
Cash Flows
The following table summarizes our cash flows from operating, investing and financing activities:
Six Months Ended
June 30,
2026
2025
Total cash provided by (used for):
Operating activities
$
2,510
$
2,582
Investing activities
(2,174)
(2,236)
Financing activities
(398)
(369)
Effects of exchange rate changes on foreign currency cash and restricted cash
1
71
Increase (decrease) in cash and restricted cash
$
(61)
$
48
Cash provided by operating activities for the six months ended June 30, 2026 was lower than in the 2025 period.
Second-quarter 2026 Form 10-Q, six-month consolidated cash flows · Filed 04/08/2026
In addition, we repurchased approximately $1.9 billion of our common shares in the 2026 period, compared to $359.7 million in the 2025 period.
Second-quarter 2026 Form 10-Q, actual first-half common-share repurchases · Filed 04/08/2026
CAPITAL RESOURCES
The following table provides an analysis of our capital structure:
June 30,
2026
December 31,
2025
Senior notes
$
4,286
$
2,729
Shareholders’ equity available to Arch:
Second-quarter 2026 Form 10-Q, capital structure and senior-note carrying amounts with comparison dates · Filed 04/08/2026
Series F non-cumulative preferred shares
$
330
$
330
Series G non-cumulative preferred shares
500
500
Common shareholders’ equity
23,200
23,376
Total
$
24,030
$
24,206
Total capital available to Arch
$
28,316
$
26,935
Debt to total capital (%)
15.1
10.1
Preferred to total capital (%)
2.9
3.1
Debt and preferred to total capital (%)
18.1
13.2
On June 9, 2026, Arch Capital completed a public offering of $2.0 billion of senior notes, consisting of $600 million of 5.250% senior notes due in 2036 and $1.4 billion of 5.950% senior notes due in 2056.
Second-quarter 2026 Form 10-Q, leverage ratios and completed senior-note offering, coupons and maturities · Filed 04/08/2026
The 2.8% increase in book value per share for the 2026 second quarter primarily reflected strong underwriting and investment returns, partially offset by $1.2 billion of shares purchased at an average price higher than the book value per share.
Second-quarter 2026 Form 10-Q, book-value growth and effect of above-book repurchases · Filed 04/08/2026
Long-Term
Incentive
Performance
Shares
n
n
Based on absolute growth in tangible book value per share over a three-year period,
supplemented by a TSR modifier.
2026 proxy statement, three-year performance-share metric and TSR modifier; filed March 24, 2026 · Filed 24/03/2026
final payout of 200% of the performance shares granted in February 2023 for the 2023-2025
performance period.
2026 proxy statement, completed 2023–2025 performance-share payout · Filed 24/03/2026
All of our NEOs are in compliance with our share
ownership guidelines.
2026 proxy statement, actual named-executive ownership-guideline compliance · Filed 24/03/2026
Our Audit Committee, comprised of independent directors from our Board, oversees the Board’s responsibilities relating to the operational (including IT risks, business continuity and data security) risk affairs of the Company.
2025 Form 10-K, independent Audit Committee operational-risk oversight · Filed 26/02/2026
Item 1. The vote on the election of the three Class I directors to hold office for a term of three years and until their respective successors are duly elected and qualified or their earlier resignation or removal.
May 2026 annual-meeting results, Class I director election for three-year terms; filed May 7, 2026 · Filed 07/05/2026
For 2025, we wrote $16.5 billion of net premiums and reported net income available to Arch common shareholders of $4.4 billion.
2025 Form 10-K, annual net premiums and common-shareholder net income · Filed 26/02/2026
•Net income available to Arch common shareholders of $1.0 billion, or $3.00 per share, representing an 18.0% annualized net income return on average common equity, compared to net income available to Arch common shareholders of $1.2 billion, or $3.23 per share, for the 2025 second quarter.
Second-quarter 2026 earnings release, common earnings and annualized GAAP return on average common equity · Filed 28/07/2026
•Net income available to Arch common shareholders of $1.0 billion, or $2.88 per share, representing a 17.8% annualized net income return on average common equity, compared to net income available to Arch common shareholders of $564 million, or $1.48 per share, for the 2025 first quarter.
First-quarter 2026 earnings release, common earnings and annualized GAAP return on average common equity · Filed 28/04/2026
Arch MI U.S. is required to maintain compliance with the GSEs requirements, known as the Private Mortgage Insurer Eligibility Requirements or “PMIERs.”
Second-quarter 2026 Form 10-Q, Arch MI U.S. PMIERs applicability · Filed 04/08/2026
The financial requirements require an eligible mortgage insurer’s available assets, which generally include only the most liquid assets of an insurer, to meet or exceed “minimum required assets” as of each quarter end.
Second-quarter 2026 Form 10-Q, available-assets versus minimum-required-assets benchmark · Filed 04/08/2026
to a minimum amount. Arch MI U.S. satisfied the PMIERs’ financial requirements with an estimated PMIERs sufficiency ratio of 165% at June 30, 2026, compared to 179% at December
Second-quarter 2026 Form 10-Q, estimated Arch MI U.S. PMIERs sufficiency at June 30, 2026; year-end comparator completed by e33 · Filed 04/08/2026
If the GSEs had fully implemented this update to PMIERs as of June 30, 2026, the changes would have reduced the available assets by 3% and resulted in a pro-forma PMIERs Sufficiency Ratio of 162%.
Second-quarter 2026 financial supplement, fully implemented investment-risk deductions and pro-forma PMIERs sufficiency · Filed 28/07/2026
Together, our eligible mortgage insurers satisfied the PMIERs’ financial requirements as of December 31, 2025 with a PMIER sufficiency ratio of 179%, compared to 186% at December 31, 2024.
2025 Form 10-K, eligible mortgage insurers' December 31, 2025 PMIERs sufficiency and prior-year comparison · Filed 26/02/2026
Generally, Arch Capital depends on its available cash resources, liquid investments and dividends or other distributions from its subsidiaries to make payments, including the payment of debt service obligations and operating expenses it may incur and any dividends or liquidation amounts with respect to our preferred and common shares.
Second-quarter 2026 Form 10-Q, holding-company dependence on cash, investments and subsidiary distributions · Filed 04/08/2026
For the six months ended June 30, 2026, Arch Capital received dividends of $1.9 billion from Arch Reinsurance Ltd.
Second-quarter 2026 Form 10-Q, actual first-half dividends received from Arch Reinsurance Ltd. · Filed 04/08/2026
(“Arch Re Bermuda”), our Bermuda based reinsurer and insurer, which can pay approximately $4.5 billion to Arch Capital during the remainder of 2026 without providing an affidavit to the Bermuda Monetary Authority.
Second-quarter 2026 Form 10-Q, Arch Re Bermuda identity and remaining 2026 distribution capacity without affidavit · Filed 04/08/2026
(U.S. Dollars in thousands, except policy, loan and claim count)
Six Months Ended
June 30,
2026
2025
Roll-forward of insured loans in default:
Second-quarter 2026 Form 10-Q, mortgage default and loss table units and six-month comparison dates · Filed 04/08/2026
Beginning delinquent number of loans
22,985
22,982
New notices
23,060
22,385
Cures
(23,793)
(24,005)
Paid claims
(733)
(600)
Ending delinquent number of loans (1)
21,519
20,762
Ending number of policies in force (1)
1,039,751
1,073,477
Ending percentage of loans in default (1)
2.07
%
1.93
%
Losses:
Number of claims paid
733
600
Total paid claims
$
34,648
$
24,653
Average per claim
$
47.3
$
41.1
Severity (2)
78.4
%
76.0
%
Average case reserve per default (1)
$
16.9
$
16.8
(1)Includes first lien primary and pool policies.
Second-quarter 2026 Form 10-Q, mortgage defaults, paid claims and first-lien primary and pool policy scope · Filed 04/08/2026
•Favorable development in prior year loss reserves, net of related adjustments, of $165 million.
Second-quarter 2026 earnings release, favorable prior-year reserve development net of related adjustments · Filed 28/07/2026
Net realized losses were $87 million for the 2026 first quarter, compared to net realized gains of $3 million in the 2025 first quarter, and were primarily the result of financial market movements on the Company’s derivatives, equity securities and investments accounted for under the fair value option method.
First-quarter 2026 earnings release, investment losses and their market-related sources · Filed 28/04/2026
The following table presents the calculation of book value per share:
June 30,
2026
December 31,
2025
Total shareholders’ equity available to Arch
$
24,030
$
24,206
Less preferred shareholders’ equity
830
830
Common shareholders’ equity available to Arch
$
23,200
$
23,376
Common shares and common share equivalents outstanding, net of treasury shares (1)
341.0
359.0
Book value per share
$
68.04
$
65.11
(1)Excludes the effects of 8.5 million and 10.2 million stock options and 0.4 million and 0.3 million restricted and performance share units outstanding at June 30, 2026 and December 31, 2025, respectively.
Second-quarter 2026 Form 10-Q, common shares and equivalents, equity and exclusion of outstanding options and units · Filed 04/08/2026
2026
2025
Non-cumulative preferred shares
Balance at beginning and end of period
$
830
$
830
Common shares
Balance at beginning and end of period
1
1
Additional paid-in capital
Balance at beginning of period
2,735
2,510
Amortization of share-based compensation
82
74
Other changes
14
4
Balance at end of period
2,831
2,588
Retained earnings
Balance at beginning of period
27,045
22,686
Net income (loss)
1,047
574
Preferred share dividends
(10)
(10)
Balance at end of period
28,082
23,250
Accumulated other comprehensive income (loss), net of deferred income tax
Balance at beginning of period
5
(720)
Unrealized appreciation (decline) in value of available-for-sale investments, net of deferred income tax:
Balance at beginning of period
134
(507)
Unrealized holding gains (losses) during period, net of reclassification adjustment
(338)
286
Balance at end of period
(204)
(221)
Foreign currency translation adjustments, net of deferred income tax:
Balance at beginning of period
(129)
(213)
Foreign currency translation adjustments
—
26
Balance at end of period
(129)
(187)
Balance at end of period
(333)
(408)
Common shares held in treasury, at cost
Balance at beginning of period
(6,410)
(4,487)
Shares repurchased for treasury
(813)
(229)
Balance at end of period
(7,223)
(4,716)
Total shareholders’ equity
$
24,188
$
21,545
See Notes to Consolidated Financial Statements
ARCH CAPITAL
8
2026 FIRST QUARTER FORM 10-Q
Table of Contents
First-quarter 2026 Form 10-Q, equity changes including share-based compensation amortization · Filed 05/05/2026
The 2026 first quarter also included higher compensation costs compared to the 2025 first quarter and transitional expenses associated with the MCE Acquisition.
First-quarter 2026 earnings release, compensation and acquired-business transition expenses · Filed 28/04/2026
Minimum required assets are calculated from PMIERs tables with several risk dimensions (including origination year, original loan-to-value and original credit score of performing loans, and the delinquency status of non-performing loans) and are subject to a minimum amount.
First-quarter 2026 Form 10-Q, PMIERs minimum-required-assets risk dimensions and minimum amount · Filed 05/05/2026
(2) The ‘Underwriting expense ratio’ includes ‘Other underwriting income.’
Second-quarter 2026 earnings release, underwriting expense ratio treatment of other underwriting income · Filed 28/07/2026
